1.0 INTRODUCTION

“Once the European Court of Justice ruled that clubs no longer had to pay transfer fees after the expiration of a player’s contract, all hell broke loose. Suddenly it was a free-for-all.” Before the Bosman ruling, a player could not leave at the end of their deal unless that club agreed to let him go on a free, or that club received an agreed fee from the buying club. The Bosman ruling created an avenue for bigger clubs to also acquire players from smaller clubs who are unable to keep their best players by being able meet their wage demands. The intention of this article is to discuss the aftermath of the Bosman Ruling.

 

2.0 WHO IS JEAN-MARC BOSMAN

In 1990, a 25-year-old Bosman was coming to the end of his contract at Belgian side RFC Liege. His two-year stint had not worked out as he had hoped, and the Belgian midfielder was offered an improved contract by a French second division side, Dunkirk.

 

3.0 FACTS OF THE CASE

Mr Bosman, a professional footballer of Belgian nationality, was employed from 1988 by RC Liège, a Belgian first division club, under a contract expiring on 30 June 1990, which assured him an average monthly salary of BFR 120 000, including bonuses.

On 21 April 1990, RC Liège offered Mr Bosman a new contract for one season, reducing his pay to BFR 30 000, the minimum permitted by the URBSFA federal rules. Mr Bosman refused to sign and was put on the transfer list. The compensation fee for training was set, in accordance with the said rules, at BFR 11 743 000. Since no club showed an interest in a compulsory transfer, Mr Bosman made contact with US Dunkerque, a club in the French second division, which led to his being engaged for a monthly salary in the region of BFR 100 000 plus a signing-on bonus of some BFR 900 000.

On 27 July 1990, a contract was also concluded between RC Liège and US Dunkerque for the temporary transfer of Mr Bosman for one year, against payment by US Dunkerque to RC Liège of a compensation fee of BFR 1 200 000 payable on receipt by the Federation Française de Football (‘FFF’) of the transfer certificate issued by URBSFA. The contract also gave US Dunkerque an irrevocable option for full transfer of the player for BFR 4 800 000.

Both contracts, between US Dunkerque and RC Liège and between US Dunkerque and Mr Bosman, were however subject to the suspensive condition that the transfer certificate must be sent by URBSFA to FFF in time for the first match of the season, which was to be held on 2 August 1990.

RC Liège, which had doubts as to US Dunkerque’s solvency, did not ask URBSFA to send the said certificate to FFF. As a result, neither contract took effect. On 31 July 1990, RC Liège also suspended Mr Bosman, thereby preventing him from playing for the entire season.

On 8 August 1990, Mr Bosman brought an action against RC Liège before the Tribunal de Première Instance (Court of First Instance), Liège. Concurrently with that action, he applied for an interlocutory decision ordering RC Liège and URBSFA to pay him an advance of BFR 100 000 per month until he found a new employer, restraining the defendants from impeding his engagement, in particular by requiring payment of a sum of money, and referring a question to the Court of Justice for a preliminary ruling.

By order of 9 November 1990, the judge hearing the interlocutory application ordered RC Liège and URBSFA to pay Mr Bosman an advance of BFR 30 000 per month and to refrain from impeding Mr Bosman’s engagement. He also referred to the Court for a preliminary ruling a question (in Case C-340/90) on the interpretation of Article 48 in relation to the rules governing transfers of professional players (‘transfer rules’).

In the meantime, Mr Bosman had been signed up by the French second-division club Saint-Quentin in October 1990, on condition that his interlocutory application succeeded. His contract was terminated, however, at the end of the first season. In February 1992, Mr Bosman signed a new contract with the French club Saint-Denis de la Réunion, which was also terminated. After looking for further offers in Belgium and France, Mr Bosman was finally signed up by Olympic de Charleroi, a Belgian third-division club.

According to the national court, there is strong circumstantial evidence to support the view that, notwithstanding the ‘free’ status conferred on him by the interlocutory order, Mr Bosman has been boycotted by all the European clubs which might have engaged him.

On 28 May 1991, the Cour d’Appel, Liège, revoked the interlocutory decision of the Tribunal de Première Instance in so far as it referred a question to the Court of Justice for a preliminary ruling. But it upheld the order against RC Liège to pay monthly advances to Mr Bosman and enjoined RC Liège and URBSFA to make Mr Bosman available to any club which wished to use his services, without it being possible to require payment of any compensation fee. By order of 19 June 1991, Case C-340/90 was removed from the register of the Court of Justice.

On 3 June 1991, URBSFA, which, contrary to the situation in the interlocutory proceedings, had not been cited as a party in the main action before the Tribunal de Première Instance, intervened voluntarily in that action. On 20 August 1991, Mr Bosman issued a writ with a view to joining UEFA to the proceedings which he had brought against RC Liège and URBSFA and bringing proceedings directly against it on the basis of its responsibility in drafting the rules as a result of which he had suffered damage. On 5 December 1991, US Dunkerque was joined as a third party by RC Liège, in order to be indemnified against any order which might be made against it. On 15 October and 27 December 1991 respectively, Union Nationale des Footballeurs Professionnels (‘UNFP’), a French professional footballers’ union, and Vereniging van Contractspelers (‘WCS’), an association governed by Netherlands law, intervened voluntarily in the proceedings.

In new pleadings lodged on 9 April 1992, Mr Bosman amended his initial claim against RC Liège, brought a new preventive action against URBSFA and elaborated his claim against UEFA. In those proceedings, he sought a declaration that the transfer rules and nationality clauses were not applicable to him and an order, on the basis of their wrongful conduct at the time of the failure of his transfer to US Dunkerque, against RC Liège, URBSFA and UEFA to pay him BFR 11,368,350 in respect of the damage suffered by him from 1 August 1990 until the end of his career and BFR 11,743,000 in respect of loss of earnings since the beginning of his career as a result of the application of the transfer rules. He also applied for a question to be referred to the Court of Justice for a preliminary ruling.

By judgment of 11 June 1992, the Tribunal de Première Instance held that it had jurisdiction to entertain the main actions. It also held admissible Mr Bosman’s claims against RC Liège, URBSFA and UEFA seeking, in particular, a declaration that the transfer rules and nationality clauses were not applicable to him and orders penalizing the conduct of those three organizations. But it dismissed RC Liège’s application to join US Dunkerque as a third party and indemnifier, since no evidence of fault in the latter’s performance of its obligations had been adduced. Finally, finding that the examination of Mr Bosman’s claims against UEFA and URBSFA involved considering the compatibility of the transfer rules with the Treaty, it made a reference to the Court of Justice for a preliminary ruling on the interpretation of Articles 48 , 85 and 86 of the Treaty (Case C-269/92).

URBSFA, RC Liège and UEFA appealed against that decision. Since those appeals had suspensive effect, the procedure before the Court of Justice was suspended. By order of 8 December 1993, Case C-269/92 was finally removed from the register following the new judgment of the Cour d’Appel, Liège, out of which the present proceedings arise. No appeal was brought against UNFP or WCS, who did not seek to intervene again on appeal.

In its judgment ordering the reference, the Cour d’Appel upheld the judgment under appeal in so far as it held that the Tribunal de Première Instance had jurisdiction, that the actions were admissible and that an assessment of Mr Bosman’s claims against UEFA and the URBSFA involved a review of the lawfulness of the transfer rules. It also considered that a review of the lawfulness of the nationality clauses was necessary, since Mr Bosman’s claim in their regard was based on Article 18 of the Belgian Judicial Code, which permits actions ‘with a view to preventing the infringement of a seriously threatened right’, and Mr Bosman had adduced factual evidence suggesting that the damage which he fears — that the application of those clauses may impede his career — will in fact occur.

The national court considered in particular that Article 48 of the Treaty could, like Article 30, prohibit not only discrimination but also non-discriminatory barriers to freedom of movement for workers if they could not be justified by imperative requirements.

With regard to Article 85 of the Treaty, it considered that the FIFA, UEFA and URBSFA regulations might constitute decisions of associations of undertakings by which the clubs restrict competition between themselves for players. Transfer fees were dissuasive and tended to depress the level of professional sportsmen’s pay. In addition, the nationality clauses prohibited foreign players’ services from being obtained over a certain quota. Finally, trade between Member States was affected, in particular by the restriction of players’ mobility.

Furthermore, the Cour d’Appel thought that URBSFA, or the football clubs collectively, might be in a dominant position, within the meaning of Article 86 of the Treaty and that the restrictions on competition mentioned in connection with Article 85 might constitute abuses prohibited by Article 86.

The Cour d’Appel dismissed UEFA’s request that it ask the Court of Justice whether the reply to the question submitted on transfers would be different if the system permitted a player to play freely for his new club even where that club had not paid the transfer fee to the old club. It noted in particular that, because of the threat of severe penalties for clubs not paying the transfer fee, a player’s ability to play for his new club remained dependent on the business relationships between the clubs.

In view of the foregoing, the Cour d’Appel decided to stay the proceedings and refer the following questions to the Court of Justice for a preliminary ruling:
‘Are Articles 48, 85 and 86 of the Treaty of Rome of 25 March 1957 to be interpreted as:
(i) prohibiting a football club from requiring and receiving payment of a sum of money upon the engagement of one of its players who has come to the end of his contract by a new employing club;
(ii) prohibiting the national and international sporting associations or federations from including in their respective regulations provisions restricting access of foreign players from the European Community to the competitions which they organize?’

On 3 June 1994, URBSFA applied to the Belgian Cour de Cassation (Court of Cassation) for review of the Cour d’Appel’s judgment, requesting that the judgment be extended to apply jointly to RC Liège, UEFA and US Dunkerque. By letter of 6 October 1994, the Procureur General (Principal Crown Counsel) to the Cour de Cassation informed the Court of Justice that the appeal did not have suspensive effect in this case.

By judgment of 30 March 1995, the Cour de Cassation dismissed the appeal and held that as a result the request for a declaration that the judgment be extended was otiose. The Cour de Cassation has forwarded a copy of that judgment to the Court of Justice.

4.0 JUDGEMENT
The Court of Justice ruled:
1. Article 48 of the EEC Treaty precludes the application of rules laid down by sporting associations, under which a professional footballer who is a national of one Member State may not, on the expiry of his contract with a club, be employed by a club of another Member State unless the latter club has paid to the former club a transfer, training or development fee.
2. Article 48 of the EEC Treaty precludes the application of rules laid down by sporting associations under which, in matches in competitions which they organize, football clubs may field only a limited number of professional players who are nationals of other Member States.
3. The direct effect of Article 48 of the EEC Treaty cannot be relied upon in support of claims relating to a fee in respect of transfer, training or development which has already been paid on, or is still payable under an obligation which arose before, the date of this judgment, except by those who have brought court proceedings or raised an equivalent claim under the applicable national law before that date.

5.0 THE AFTERMATH

The effects of the Bosman Ruling were felt almost immediately. In 1995, Ajax won the UEFA Champions League with a team with an average age of 23 – despite the presence of two veterans. Within 3 years of its success, the club lost 4 of its best players – Patrick Kluivert, Edgar Davids, Michael Reiziger and Winston Bogarde; on free transfers. Describing the effects of the Bosman Ruling, former Ajax captain, Frank Arnesen said:

“… the rich countries came in and took their players.”

The balance of power shifted from clubs to players. Article 48 of the Treaty of Rome guaranteed players freedom of movement anywhere in Europe. Clubs, tied to their locality, their support and their domestic competition, had to stay put. Players near the end of their contract were now free to move anywhere for nothing. In 1994, Blackburn Rovers made Chris Sutton the first 10,000 a-week footballer in Britain. And in 2001, Sol Campbell signed a 100,000 a-week contract to move from Tottenham to Arsenal; a tenfold increase in the space of seven years.

The Bosman Ruling allowed clubs to sign as many players as possible, as long as they were Europeans, as the Court had precluded the Article in the treaty as regards a limit in the number of foreign players European clubs could have in their teams. Players began to move where the money was. Medium sized clubs could no longer afford to keep hold of their best players, and so talent began its inexorable flow upwards. The clubs wanted to prevent players reaching the end of their employment contract and leaving for free. So they started negotiating contracts for substantially longer periods. Clubs were tempted to draft appropriate clauses in the players’ contracts which allowed the clubs to secure compensation for their loss. Another method devised by the clubs was to insert clauses in the employment contracts whereby the clubs unilaterally reserved the right to extend the agreement, the so-called unilateral extension option.

In an interview, Bosman himself said the rule had not only backfired on him, but the way it has been applied by clubs has led to the opposite of the egalitarian utopia he envisaged. He said:

“The big players, they have nice feats and smaller ones have only crumbs… for me, the Bosman ruling was about the distribution of money towards the smaller clubs. What we were seeing all of a sudden were big clubs growing bigger and all the money circulating between these clubs. Players again became like merchandise that was just traded.”

The Bosman ruling created an avenue for bigger clubs to acquire the best players, and also made the best players command the highest fees (salaries and transfer wise). While the effect of the case may not have been considered at that time, its aftermath has been devastating for the small clubs, who until then had a level playing field with the big clubs. Within four years of winning the Champions League in 1995, the ground-breaking Ajax side of Louis van Gaal had been entirely broken up. Elsewhere, it cemented existing dynasties: 13 consecutive titles for Rosenborg in Norway, 16 out of 20 for Dinamo Zagreb in Croatia, 17 out of 19 for Olympiakos in Greece.

6.0 CONCLUSION
The aftermath of the Bosman Ruling had proven to have a two-way effect – making bigger clubs acquire the best players, and players being able to demand higher fees from clubs before signing contracts. While some have argued that transfer fees might seem like “slavery” the after effects of the ruling is still yet to take full force, as football has become a business, and the difference between bigger and smaller clubs will keep growing wider.

Ayomide ‘Toba Eribake is a Sports Law enthusiast, and also has interests in Human Rights and ADR. He also loves researching and reading various subjects of interest.

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